Levy v. Ryland

• Decision Date: 01 July 1910
• Docket Number: 1,874.
• Parties: LEVY v. RYLAND.
• Court: Nevada Supreme Court

109 P. 905

32 Nev. 460

LEVY v. RYLAND.

No. 1,874.

Supreme Court of Nevada

July 1, 1910

Appeal from District Court, Washoe County.

Suit by William Levy against Richard Ryland. From an order sustaining a demurrer to the complaint, and from a judgment dismissing it on refusal to amend, plaintiff appeals. Reversed.

Mack & Green, for appellant. Cheney, Massey & Price and C. L Harwood, for respondent.

SWEENEY J.

This is a suit in equity brought by the appellant, Levy, wherein he seeks to recover from the respondent, Ryland, the legal title to an undivided one-half interest in certain real property in the city of Reno, county of Washoe, state of Nevada. To the complaint of appellant, respondent interposed a demurrer in the lower court setting forth the following grounds "(1) That the cause of action stated accrued more than five years before the commencement of the action. (2) That at no time within five years next preceding the institution of the suit was appellant seised or possessed of the premises in question, as provided by section 3707 and section 3708 of the Compiled Laws. (3) That the recovery of the $250 excess in the purchase price paid respondent is barred by section 3718 of the Compiled Laws. (4) That the cause of action is barred by the three-year limitation of section 3718 of the Compiled Laws. (5) That the contract sought to be enforced is oral and therefore in violation of the statute of frauds and of section 2694 of the Compiled Laws. (6) That the complaint fails to state sufficient facts to constitute a cause of action." The demurrer was regularly argued and sustained. The plaintiff refusing to amend his complaint, a judgment of dismissal was ordered, from which order of the lower court sustaining the demurrer and judgment dismissing the complaint plaintiff appeals.

For the purpose of considering the points of law raised by the demurrer, the facts as pleaded in the complaint are considered to be true. This court, in passing upon the sufficiency of the complaint, does so solely from a legal standpoint in considering the points raised by the demurrer, and, if we find the points raised by the demurrer not to be well taken in law, by answer respondent will, on issues joined, have the lower court pass upon the facts alleged.

In the complaint it is alleged: That in December, 1902, appellant and respondent entered into a mutual agreement to purchase certain real estate in Reno, Nev. That by this agreement each was to pay one-half of the purchase price and each was to own an undivided one-half interest in the property. That the title to the whole property was to be taken in the name of respondent, Richard Ryland, and thereafter he was to deed to the appellant, William Levy, an undivided one-half interest. That about January, 1903, pursuant to the agreement, Ryland purchased the property for $3,500, receiving the title in his own name. That thereafter he informed the appellant that half of the purchase price was $2,000, and about January 16, 1903, this was paid to respondent by appellant. That by reason of this representation the respondent, Ryland, is alleged to have fraudulently secured from the appellant, Levy, $250 more than was coming to him under the agreement. That the property agreed to be purchased, and to which, pursuant to their mutual agreement, respondent received title, was known as lot 9, in block "W" in the city of Reno, a lot with an east front of 50 feet on Center street and a depth of 140 feet. That about January 16, 1903, respondent executed a deed to appellant conveying to him an undivided one-half interest in the east 80 feet of lot 9, instead of an undivided one-half interest in the whole of the lot, thus retaining the west 60 feet in his own name. It is this west 60 feet that complainant seeks to recover in this action. It is further alleged that the deed was made by respondent with intent to defraud appellant of his interest in the west 60 feet of said lot, and that at the time the deed was delivered to and accepted by appellant he believed it conveyed to him an undivided one-half interest in the whole property taken in the name of respondent pursuant to their agreement. Appellant sets forth that for many years prior to the execution of the deed appellant and respondent had conducted business together in the purchase and sale of real estate; that appellant had great confidence in the integrity and fair dealing of the respondent; that at the time he received the deed from respondent appellant, because of this confidence, relied upon and believed the representations of the respondent that the deed conveyed an undivided one-half interest in the whole lot; and that appellant did not discover the alleged misrepresentations until March, 1908. It is further alleged that in the month of March, 1908, appellant demanded of respondent a deed conveying an undivided one-half interest in the whole lot, or in that portion which had not been conveyed to him, which respondent refused to do. The file marks on the complaint show that the suit was instituted on June 21, 1909.

As before stated, for the purpose of considering the legal sufficiency of the complaint, as tested by the points of law raised by the demurrer, the facts alleged in the complaint are considered as true.

The points of law raised by the demurrer present the following questions to be determined from the complaint: Was the agreement alleged to have been entered into between Ryland and Levy, for the purchase of the lot in question, such an agreement as to create a resulting trust? If so, must the agreement be alleged to have been in writing? Is the agreement made and entered into between Ryland and Levy, as alleged in the complaint, such an agreement, if creating a resulting trust, as would be without the statute of frauds? Did the statute of limitations run from the time of the agreement alleged to have been entered into between Ryland and Levy, or from the time of the alleged discovery of the alleged misrepresentations by Levy in the deed given him by Ryland?

The law is well established that where two persons purchase real estate, and the title is taken in the name of one of them, there is a resulting trust in favor of the other; and that the possession of the one in whose name the title to the land is taken is considered in law that of the trustee, and his possession as trustee is the possession of the cestui que trust. White v. Sheldon, 4 Nev. 280; Frederick v. Haas, 5 Nev. 389; Dutertre v. Shallenberger, 21 Nev. 507, 34 P. 449; Osborne v. Endicott, 6 Cal. 154, 65 Am. Dec. 498; Miles v. Thorne, 38 Cal.

335, 99 Am. Dec. 384; Love v. Watkins, 40 Cal. 547, 6 Am. Rep. 624; Hearst v. Pujol, 44 Cal. 230; Hoffman v. Vallejo, 45 Cal. 564; Luco v. Detoro, 91 Cal. 405, 18 P. 866, 27 P. 1082; Fulton v. Jansen, 99 Cal. 587, 34 P. 331; Scadden Flat Gold M. Co. v. Scadden, 121 Cal. 33, 53 P. 440; Fleishman v. Woods, 135 Cal. 256, 67 P. 276; Faylor v. Faylor, 136 Cal. 92, 68 P. 482.

An examination of the allegations of the complaint, we believe, sufficiently pleads such an agreement, which, if proven to be true, would create a resulting trust in favor of the appellant. The allegations of the complaint clearly allege a mutual agreement, wherein the respondent should purchase, for the joint benefit of himself and appellant, the lot in question, pursuant to a prior agreement entered into for the joint purchase of the lot for their joint benefit, at which time appellant agreed to pay one-half the purchase price for one-half the lot, the title to be taken in the name of respondent, and one-half thereafter deeded to appellant, the petitioner herein. And the complaint further alleges that in pursuance of this agreement half of the purchase price was paid to the respondent.

The authorities hold that even though respondent advanced the entire amount necessary to purchase the land at the time of the purchase, with an understanding previously had with the appellant that the purchase should be for the joint benefit of himself and appellant, the part of the purchase price advanced by respondent is considered in law to be a "loan" by him to appellant, which is considered in law an actual payment in behalf of the appellant sufficient to bring the transaction within the rule that payment must be made at or about the time of the purchase in order to effectuate a resulting trust. Hidden v. Jordan, 21 Cal. 92; Millard v. Hathaway, 27 Cal. 121; Sandfoss v. Jones, 35 Cal. 481; Walton v. Karnes, 67 Cal. 255, 7 P. 676; Hellman v. Messmer, 75 Cal. 166, 16 P. 766; Thomas v. Jameson, 77 Cal. 91, 19 P. 177; Kendall v. Mann, 11 Allen (Mass.) 15; Burleigh v. White, 64 Me. 23; McDonough v. O'Neil, 113 Mass. 92; Lehman v. Lewis, 62 Ala. 129; Towle v. Wadsworth, 147 Ill. 80, 35 N.E. 73; Hodge v. Verner, 100 Ala. 612, 13 So. 679; Milner v. Standford, 102 Ala. 277, 14 So. 644; Howe v. Howe, 199 Mass. 598, 85 N.E. 945, 127 Am. St. Rep. 518.

As illustrative of this rule, the Supreme Court of California in the case of Hellman v. Messmer, said: "The rule is well settled that when real property is purchased, and one party pays the purchase money and another takes the title, a resulting trust arises in favor of the former, and the latter holds the title as his trustee. But the trust must result, if at all, at the time the deed is taken. No oral agreements and no payments made after the title is taken will create a resulting trust. The party claiming the benefit of the trust must show that the money was paid before or at the time of the execution of the conveyance. *** It is not, however, necessary that the money should have been actually paid by the party setting up the trust. It may have been paid by the party who took the title, but advanced as a loan to the other party, and, if...